Here is another example of he problem with storing your cash in an untrustworthy entity. Many Bitcoin services are based on having some third party store your coins for you.This has now lead to major thefts or losses of coins on a number of occasions. There is no insurance or mechanism for restitution to the people who have lost their coins. Reports suggest that 740,000 Bitcoin have gone missing. The precipitous loss of value on exchanges has also cause a further hit to the value of everyone’s coins .
I strongly encourage Bitcoin users to follow one of the following strategies to protect themselves.
1) Only purchase Bitcoins immediately prior to use, and convert your coins back to a conventional currency in an insured bank account as quickly as possible after receiving them. This minimized your exposure to loss, theft, or market volatility.
2) Keep your Bitcoins securely stored in your own, ideally offline, wallet. Only allow third parties to have the minimum possible amount of coins for as short a time as possible.
This is episode 15 of the Privacy Blog Podcast for December, 2013 In this episode I talk about:
How people are tracking the biggest ever theft of Bitcoins
A keylogger that has compromised 2 million accounts
Why a majority of Turks may be at risk of identity theft
How an anonymous bomb hoaxer got caught
A demonstration of activating iSight cameras without the indicator light
and finally, some thoughts on staying safe this holiday season.